Activists had campaigned against facility, claiming it depleted groundwater in region and hurt local agriculture

NEW DELHI—Coca-Cola Co. has closed a bottling plant in north India that activists had campaigned against, signaling challenges the U.S. beverage giant faces as it seeks to expand in the world’s second-most populous nation.

Activists blame the facility for depleting groundwater and undermining agriculture in region.

In a statement disclosing the move on Wednesday, Coca-Cola didn’t explain why it had closed the factory in Kaladera, one of more than 50 plants that produce fizzy drinks for the company in India. It said only that “plant capacity utilization is a derivative of the current market demands and projections.”

“Should there be a change in demand and volume, like all other plants, we may utilize the capacity of Kaladera in the future,” it added.

The company’s statement made no mention of the resistance Coca-Cola has faced from activists, who waged a decadelong battle against the plant.

The campaign against the factory was spearheaded by a couple activist groups. One was the India Resource Center led by San Francisco-based Amit Srivastava, who has been targeting Coca-Cola in India for many years.

“Coke drained us of water,” said Mahesh Yogi, of activist group Kaladera Sangharsh Samiti. “Water meant for poor farmers and their fields was time and again diverted to the factory.”

A Coca-Cola spokesman in India said it wasn’t fair to say groundwater levels had receded because of the factory, which was erected in 2000. The company said the “plant is a user of a minuscule share of water at Kaladera, tapping much less than a percent of area’s available water.”

An assessment of the plant and others, commissioned by the company and carried out in 2006, had warned water levels in the region were already dangerously-low. That assessment, carried out by New Delhi-based nonprofit The Energy and Resources Institute, had suggested that Coca-Cola shut the facility because “the plant’s operations in this area would continue to be one of the contributors to a worsening water situation and a source of stress to the communities around.”

The plant’s closure is the most recent challenge for Coca-Cola in India, the company’s sixth-largest market by volume sales. In 2012, The Atlanta-based soft-drinks maker said it had planned to inject $5 billion into the country by 2020 and declared the South Asian nation a focus market.

But bureaucratic snags, opposition from local groups and persistent run-ins with farmers in a largely-agrarian and water-deprived country have forced the company to hit the brakes on some of its ambitious projects.

Last year, Coca-Cola shelved plans for a proposed 5 billion rupee ($73 million) plant in the southern state of Tamil Nadu because of fierce opposition from farmers who feared the factory would erode groundwater levels and pollute neighboring water bodies.

Coca-Cola said it dropped that project because of local activism and, in part, because government approvals, such as for those to lay a water line and pave land, weren’t granted “in spite of repeated follow-ups.”

In 2014, the company dropped plans for a new bottling line at an existing facility in the northern city of Uttar Pradesh after authorities denied permission amid local protests. Coca-Cola also shut a plant in the southern state of Kerala in 2004 over allegations the factory drained and polluted local water supplies. The company denied any wrongdoing at the time.